The leaders of the Irish Republic's two largest parliamentary parties say they have agreed to form a new coalition government.
Talks between the centre-right Fine Gael and the centre-left Labour Party centred on how to tackle the deficit and public sector cuts reports the BBC.
Last month's election saw the ruling Fianna Fail roundly defeated over its handling of Ireland's economic crisis.
Fine Gael fell short of a majority with 76 seats while Labour took 37.
Details of the coalition are expected to be released later on Sunday.
Both leaders pledged in the election campaign that they would seek to renegotiate the terms of Ireland's 85 billion euro joint European Union-International Monetary Fund bailout.
But the parties differed on the scale of public sector cuts, the split between tax rises and spending cuts needed to reduce the budget deficit and the time frame for cutting the deficit.
